Author: The Nation

Our Reporter

 

Leading fruit juice, drinking yoghurt, evaporated milk, and snacks manufacturer, CHI Limited, has extended warm wishes to all Nigerians for a happy, healthy, and prosperous 2021 on the occasion of the New Year celebrations. The company urges Nigerians to rekindle their hope for a better year in their personal lives and for the country, as they begin the New Year.

The company encourages Nigerians to apply their positive, can-do spirit for which they are well known, in their endeavours and to overcome any challenges they may currently face as individuals and as a country.

The company noted that 2020 was an extraordinary year for many Nigerians due to the COVID-19 global pandemic, the resultant unprecedented disruptions to socio-economic routines, and the crisis in the public health sector which made the year a very difficult one for most Nigerians.

Against the background of the resurgence of the COVID-19 pandemic, CHI Limited charges Nigerians to remain optimistic, observe all prescribed protocols, and embrace a lifestyle that would guarantee them a healthy, productive, illness-free, and successful 2021. The company notes that the country was able to address the challenges posed by the first wave of the pandemic and is exploring varied opportunities for dealing with the resultant effects of the pandemic in various sectors of the economy.

It commends the spirit of resilience, resourcefulness, and sense of determination of Nigerians have displayed thus far to get through the challenging period, and implores them to leverage these qualities to create a better 2021. The company believes that the country is ready to embrace opportunities that will come in the new year that has just begun.

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On its part, CHI Limited remains committed to enabling healthy living and happier lives for all Nigerians, by promoting everyday wellness through nourishment from its range of healthy, nutritious, and high quality fruit juices and dairy products.

CHI Limited Managing Director, Deepanjan Roy, said despite the challenges currently being experienced in the country, 2021 offers Nigerians another chance to achieve everything they have set out to achieve on a personal and collective front.

“As we celebrate the New Year, it is important for us to take stock of the outgone year and embrace new learnings for improvement in the new year,” he added. “Together, we can continue improving to achieve more despite any challenges we may experience, with renewed hope and a positive outlook for the New Year. We wish every Nigerian a safe, healthy, and prosperous new year ahead.”

Sir Sunny Nwosu is National Coordinator Emeritus, Independent Shareholders Association of Nigeria (ISAN). In this interview with Ibrahim Apekhade Yusuf, he speaks on the raging storm over unclaimed dividends and other related issues. Excerpts:

 

AS a shareholder group what is your position on this vexatious matter?

They don’t have the right to take what does not belong to them. They don’t. It’s a private sector money and it’s from private investors. They never discussed anything either in private with the shareholders or in the open with the shareholders. What they are using is that they just feel that they have the power to do anything, not knowing that we are in a democracy. You cannot just use power on what does not belong to you.  It’s a daylight robbery. I said it to the senators and I said very clearly that if we are attacked by armed robbers we run to the government police and army to protect us.  But when those that are supposed to protect us turn to armed robbers what do we do? I said that at the senate and the Minister said it was an insult. I said no, it wasn’t an insult. The fact is that we haven’t seen the end.

There have been situations in a democracy where acts are nullified. At least there is room for arbitration on all these. You cannot just come overnight and say you want to borrow forcefully. Can you just go to the banks and tell the banks you must borrow forcefully?  It’s not possible. So you cannot borrow forcefully. All you need to do if you want loan from the public, you raise a debenture or raise stock and people will voluntarily buy into it, which they (government) has been doing. But they are overwhelmed with loans. Now, they have borrowed from Pension funds and those that own the pension will not get their pension; people will retire and at old age they will not even get their pension or even anything.  Now you’re saying that unclaimed balances in the banks you want to borrow it. And I asked them at the Senate, I said, are we at war where certain unusual things happen? They couldn’t answer me. The Minister, the Minister of State, the Permanent Secretary, was all there, they couldn’t answer me.

What we are seeing is just an attack by ‘armed-robbers’ without gun on investors. Even though you call it unclaimed dividends, but all these diminish on daily basis, people claim their dividends ion daily basis. There are people that have travelled; they are not ion the country as such they couldn’t demutualise their investments in order for the dividends to go straight into their accounts. But it’s there and you’re calling it unclaimed dividends. That’s fine.

What is the situation in other countries, are their best practice to learn from?

If you talk of unclaimed dividends we have best practice to draw from abroad. During my visit to the senate, I gave them references. In the UK for instance, they have about £4billion. If you translate that into naira, you know what that means? Yet they have not been tempted to touch it. The UK government did not say because they are having a pandemic that rampaging everywhere that they want to convert peoples’ money. In Austria, you’re having 1billion Austria pounds and they have not converted it.  In Nigeria, you say you have N150billion, and if you work it out today, it’s not even up to N150billion again because every day they pay out dividends. And I told them, I said, the central Bank of Nigeria (CBN) also has a hand in it because if you do not have forex cover to multinationals that invested in this country, their dividends would be hanging. You also call that unclaimed dividends and you want to borrow it with force.

What is the position of the law?

The existing law says unclaimed dividends remain unclaimed if up to 12 yeas whereby whatever is left there will revert to the company that place it, now the government went to reduce the statutory years to six so that you can take the money. So, I insist, it’s a daylight robbery, it’s an unfortunate thing; it’s like using gun on investors.

In your own view, do you think this would erode investor confidence in the country given the way and manner the government is going about this whole exercise?

Yes, it’ll not augur well for the investing climate of the country because people will now be afraid to invest in the country.  It’s definitely sending g the wrong signal to investors. Other countries are looking for investors, and you’re destroying your own investment climate. And like I told them at the Senate, most of the people who are attacking unclaimed dividends today, do not believe in investment. They will tell you how can they leave their money with anybody to manage for them?

As a shareholder holder group, are you planning any class action against the government over this issue?

I told you earlier, that there is a three tier government and especially in a democracy there is room for arbitration. So that can tell you our mindset. We have not heard the last of this case yet.

The federal government’s plan to bankroll the 2021 budget using proceeds from unclaimed dividends as well as dormant accounts has led to a chain of reactions including fierce opposition from shareholder groups and other interested parties who have vowed to exhaust all legal means to stop the government, reports Ibrahim Apekhade Yusuf

 

TO say that the federal government has literally hit the bottom is simply stating the obvious. Truth is, the government is battling serious cash crunch, no thanks to the rampaging coronavirus pandemic which has caused a lot of financial strain and adversely affected the ability of government to meet its statutory responsibility. To address the gap, government in its wisdom is looking at borrowing from proceeds from unclaimed dividends and dormant accounts.

Dividends are cash rewards that a company gives to its shareholder.

As simple as that request is, this has not gone down well with major stakeholders, especially shareholder groups, who hold the view and very strongly too that they should be given the right of first refusal before anyone else.

Crux of the matter

At issue is that the federal government plans to borrow from unclaimed dividends and funds from dormant account balances of Deposit Money Banks.

This is as contained in Part XII of the Companies and Allied Matters Act in the signed Finance Act 2020.

Under Part XII of the Act, it was stated that dividends were special debts due to and recoverable by shareholders within 12 years, and actionable only when declared.

The Act stated that dividends that were unclaimed after 12 years should be included in the profits that should be distributed to the other shareholders of the company.

It noted that notwithstanding subsections (1) and (2), dividends of a public limited liability company quoted on the Nigerian Stock Exchange (NSE) which had remained unclaimed for a period of six years or more from the date of declaring the dividend shall be immediately transferred to the Unclaimed Funds Trust Fund.

“Such unclaimed dividends transferred to the Unclaimed Funds Trust Fund shall be a special debt owed by the Federal Government to the shareholders and shall be available for claim by the shareholder at any time, pursuant to the aforementioned perpetual trust,” the Act stated.

SEC position on unclaimed dividends

According to the Securities and Exchange Commission (SEC) the proposal by the federal government to set up unclaimed dividends and balances trust fund is not a bad one after all.

Making this submission recently was the Head, Securities and Investments Services (SIS) Department Mr. Abdulkadir Abbas. He spoke while making clarifications on the Commission’s presentation at the one day Public Hearing on the Finance Bill, 2020 in Abuja.

He said the Commission is requesting to be allowed to continue to constructively manage the issue of unclaimed dividends for the development of the nation’s capital market.

According to him, “We are not against the proposal to set up unclaimed dividends and balances trust fund. Our concerns are with respect to the governance structure of that proposed fund and that is why we are asking for reconsideration. We are advocating modifications of the provisions with regards to management and governance of the trust fund to avoid possible harm to the capital market which is still struggling to survive.

“SEC being the capital market regulator and mandated by the Investments and Securities Act to protect the interest of the investors, to be the one to administer or to manage or to supervise the operations of that fund, that is what we are requesting.”

Mr. Abbas, who represented the Director-General of the SEC at the Public Hearing assured the Senate that, the SEC would continue to monitor the compliance of the rules and regulations on the treatment of unclaimed dividends adding that its ultimate objective is to pool unclaimed dividends into a well-structured and well governed Fund with independent management under the existing National Investor Protection Fund (NIPF) as found in other jurisdictions like Kenya and India.

He added that alternatively, the unclaimed Dividends Trust Fund could be set up as an independent Fund to be managed by the private sector (Professionals Fund Managers) under the supervision of the Commission

In a related development, the Director-General of the SEC, Mr Lamido Yuguda, had last November stated this during an investigative hearing on the need to investigate the rising value of inclined dividends, unremitted withholding tax on dividends and their attendant effects on nation’s economy, recalled that SEC had introduced the regularisation of multiple accounts in 2015 where it requested all shareholders with multiple accounts to harmonise their accounts by filing e-dividend mandate forms and submitting same to their banks or stockbrokers for onward transmission to their respective registrars.

Yuguda stated the SEC has repeatedly canvassed and maintains that the most viable option is the removal of the 12-year bar for investors to claim their dividends imposed by CAMA.

He said additionally, accumulated unclaimed dividends should be invested through a capital market vehicle that will focus on critical infrastructure development for the benefit of investors.

This he said, will be a win all round, as the incentive for accumulating unclaimed dividends will be curbed, the investors who earned the dividends will benefit and the taxes levied on the capital market vehicle will generate the much-needed revenue for the government.

Yuguda highlighted various initiatives by the SEC to address the challenges of unclaimed dividends to include the abolition of the use of in-house registrars by paying companies, for their operations to improve transparency and remove the conflict of interest which has resulted in registrars becoming separate entities from their parent companies.

The SEC DG disclosed that the Commission is currently working on an initiative to ensure consolidation of multiple accounts which involves the verification and isolation of the account beneficiaries with a deadline of the first quarter of 2021. This initiative is in addition to the forbearance window granted by the Commission to holders of multiple accounts to show up and consolidate.

Finance Minister allays fears

For those still in doubt, especially owners of dormant accounts and unclaimed dividends, they have nothing to lose as they would be paid their entitlements, from the Special Trust Fund to be set up by the federal government, once they are properly identified.

The Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, made the clarification while fielding questions during the virtual presentation of the 2021 federal government budget recently.

“The unclaimed dividend and dormant accounts will be pooled into a Special Trust Fund. At any time that a bank or the registrar confirms that this is the true owner of such funds, the government will release such funds,” the minister said in response to a question on whether the federal government wanted to use the controversial fund to finance its budget deficit.

Not at ease with FG’s plan 

Speaking with a cross-section of experts they argued that the issue is indeed vexatious, arguing that how can the government arm-twist shareholders to surrender the proceeds of their investments without any recourse to them in the first place?

This amounts to government trying to rob Peter to pay Paul, they argued, adding that government is not a shareholder so how would it now take delight in taking money that does not belong to it, especially considering the fact that they may not be able to pay back as and when due. They readily cite the case with the pension funds, which has been borrowed by the government in recent times.

One of those who have mounted opposition against the government’s action plan is Mr. Boniface Okezie, Chairman, Progressive Shareholders Association of Nigeria.

Raising some posers, Okezie said, “If the federal government truly wants to borrow as they have claimed, how are they going to apply to borrow the money? Would they approach the CBN, AMCOM, and SEC?”

At the centre of this mess is the issue of 2020 Financial Act, which as far as Boniface is concerned, is akin to Decree 1983. “This is a battle the shareholders have resisted in the past and even right now the matter would be challenged at the court of law. The government has no right to appropriate what does not belong to it. According to the position of the law, once the claims are status barred, only the companies have a right to take the money. That is what the CAMA Act says so the government can just use fiat. It smacks of fraud; it’s simply robbing Peter to pay Paul.”

He would rather the government should continue to borrow from the where they have been borrowing from. “We have always told the government to expunge the law and review it upward by removing all the bottlenecks that affect disbursement of claims to the rightful owners from the statutory 12 years to about 50-100 years. This is because there are cases where shareholders die before they get their entitlements but if their families can establish the veracity of their claims they can be paid. There is also poor postage system which leads to mails and notifications getting lost in transit. This is why we stress that the government needs to intensify efforts at awareness and not deliberately cause hiccups for the citizenry.

“But sadly, the amendment made on the CAMA as shown in the Financial Act made a mess of the whole thing and that is what has given rise to the government’s plan of action. He would rather the federal government approach its regular sources such as the Bretton woods institutions like the World Bank, the IMF, AfDB, and China.”

A divergent view

Unlike most commentators, Chairman, Trusted Shareholders’ Association of Nigeria (TSAN), Alhaji Mukhtar Mukhtar, has a different view entirely.

While noting that successive heads of the SEC tried to device possible means and ways of resolving the issue of backlog of unclaimed dividends in the past, Mukhtar said, “Nobody can support anybody to take anybody’s money. With the estimated over N150billion unclaimed dividends, it doesn’t make sense for these funds to be lying fallow.”

More importantly, with the Finance Act already passed, Mukhtar said, “There is really nothing anybody can do. As far as I’m concerned, the only option open to us as shareholder groups is to advise on how to manage the funds. Of course, if government borrows these monies it would pay interest on it.”

On plans by some shareholders groups to institute legal action against, Mukhtar said it was an exercise in futility as it was already a fait accompli.

“Instead of opposing the government, I beseech us to come together. Of course, there must modalities for how such funds would be managed so that it is not misappropriated by those saddled with the responsibility of overseeing the funds.  I also believe the registrars are complicit in this whole matter of unclaimed dividends, most of who in the past abusing the process.  I believe there is some level of connivance with the registrars and some of its backers within the shareholder groups. Everything appears shrouded in secrecy. For long, we fought to ensure that savings accounts rather than only current accounts can also be used to save proceeds of share dividends. It was along-drawn battle, and we only succeeded just two years ago to force down the hand of the government to allow the use of savings accounts. Come to think of it how many Nigerians have current accounts? They deliberately removed savings.”

Why CBN barred banks from claiming dormant accounts

It would be recalled that the apex bank had set fresh guidelines for the management of dormant accounts and other unclaimed funds by banks.

According to information sourced from the CBN website, in the circular tagged, “Guidelines for the Management of Dormant Accounts” dated February 16, 2015, the CBN after reviewing and incorporating comments from various stakeholders, noted that the absence of clear guidelines for the management of dormant accounts in Nigeria resulted in different treatments of dormant account balances by deposit taking financial institutions, thus raising concerns among bank account holders, regulators and other stakeholders.

Besides, representations received by the CBN from stakeholders on the subject highlighted the need for the CBN to develop a regulatory framework on the management of dormant and inactive accounts as well as other unclaimed funds in Nigeria for the benefit of the banking system.

The essence of the guidelines is to curb possible abuses in the operation of dormant and inactive accounts, set operational standards for banks and other financial institutions in line with best practices and to reinforce the rights of depositors and/or customers.

Thus, during the inactive period, the bank shall elevate controls on the account in line with its precautionary policies, which may include surveillance procedures and second level authorisation. Also, the customer shall not be required to provide any documentation to activate the account.

For dormant account, it shall be classified as dormant if there has been no customer or depositor-initiated transaction in it for a period of one year after the last customer or depositor-initiated transaction. When the account becomes dormant, the bank shall institute controls consistent with its precautionary policies, including surveillance procedures and second level authorisation. To make such account active, the customer is to provide satisfactory evidence of account ownership, means of identification and present place of residence.

Specifically, once accounts become dormant, they shall be reported quarterly to Banking Supervision or Other Financial Institutions Supervision Department of the CBN, as the case may be, along with efforts made by the obligor bank to locate the owners or their personal representatives.

Three months to dormancy, the bank shall notify the account holder of the status of the account. For individual accounts that the bank cannot reach the account holder during the three (3) months period, it shall contact the next-of-kin to assist in locating the account holder(s). This will be done within one month after the account has been declared dormant. (For corporate accounts the bank shall contact the directors of the entity or seek information from the Corporate Affairs Commission on the Directors).

 

By Adeola Ogunlade

 

A LEADING Real Estate company in Lagos, Landwey has concluded plans to open Nigeria’s first ever wellness and polo city on the 3rd of April.

The city called “Isimi Lagos”, according to the firm, is an ode to the peace of mind it promises to give to its future residents.

The Managing Director of LandWey, Olawale Ayilara said this yesterday to journalists, that Isimi Lagos holds the promise of countless ways to enjoy an active and beautifully diverse lifestyle within nature; the perfect meeting point of technology and architecture.

He said that nothing beats the picturesque scenery of the city, and residents would be privy to the 360 panoramic view of nature at its finest.

He said that residents of this majestic city would not only enjoy quality time away from the bustle of Lagos, but they get the gift of nature and the world around them to explore, all the while investing in their physical and emotional well-being.

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He explained further that the idyll of the city is punctuated by an all-natural lake which can be used for everything from kayaking to family picnics, and residents who have dreamed of destination weddings can take advantage of the waterfront which makes for the perfect wedding venue.

Ayilara posited that fine dining restaurants in the city make for the most exquisite dining experience, set to satisfy even the most sophisticated palates, with organic ingredients freshly harvested from the farm. Asides an extensive array of amenities, the city offers a range of home styles, and residents can choose the best suited home for them.

“A utopia for sports lovers, the city boasts of a standard polo turf with a stable that houses some of the world’s best horses, and being surrounded by kilometers of riding trails provides a state-of-the-art riding experience. The golf course is certain to thrill both the pros and the beginners, and would make residents fall in love with the game.”

“Sophisticated meeting rooms and workspaces situated within the tech valley are equipped with high-speed internet and uninterrupted power to boost efficiency of the residents, and the sheer elegance of these spaces make them the perfect place to harness intellectual capacity, fueled by the peace that abounds around.”

 

 

 

 

By Afolabi Idowu

 

IN recognition of its meritorious contributions to the development of Olambe Community in Ogun State, Stanbic IBTC Bank PLC, a subsidiary of Stanbic IBTC Holdings PLC, has been honoured with the Outstanding Community Service Award in the Corporate Social Responsibility (CSR).

The award, organised by Ascend Hotels Limited, in conjunction with Rainbow Entertainment, was held recently. It was an avenue to recognise brands and personalities who positively impacted the community through their activities.

The selection process was based on wide consultation with various community leaders and endorsement letters that provided specific details about the reputation, dynamic growth and sustainable business achievements and award recipients’ qualifications.

Expressing the Bank’s appreciation for the recognition, Wole Adeniyi, Chief Executive, Stanbic IBTC Bank PLC, stated that the organisation is excited to reap the fruits of its various corporate social responsibility initiatives which is a testament of the hard work we put into supporting the underserved within the communities we operate. Adeniyi reiterated that the Bank, besides its business objectives, also strongly believes in giving back to the communities where it operates to create an enabling environment in society continually.

“Through our Corporate Social Investment (CSI) initiative, which is hinged on three major pillars, namely: Education, Health and Economic Empowerment, we consistently reach out to underserved communities and provide the assistance required to make the society a better place,” Adeniyi added.

 

 Franca Ochigbo, Abuja

 

THE Minister, Industry, Trade and Investment, Adeniyi Adebayo has inaugurated the steering committee for the implementation of the Export Expansion Facility (EEF) advising that if a country does not grow its non-oil exports, the economy would remained vulnerable to external shocks with attendant ripple effects of devaluation, inflation and unemployment.

In a statement signed by the Special Assistant on Media, Ifedayo Sayo, the Minister said export growth is at the centre of the county’s strategy for diversifying Nigeria’s sources of foreign exchange and reducing the vulnerability of the economy to external shocks.

The Minister listed the duties of the steering committee to include ensuring the program is implemented in line with the federal government’s objectives and for the benefit of its intended beneficiaries.

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Among the terms of reference of the Committee, is to approve the implementation strategy of the EEF’s projects and the target beneficiaries for each project, where applicable as well as approve disbursements to beneficiaries, vendors and implementation partners.

Besides, the EEF is aimed at protecting export businesses from the effects of the COVID-19 pandemic, safeguarding jobs and de-risk the economy from shocks like COVID.

According to him, the primary goal is to increase Nigeria’s export capacity in the near term and its export volumes in the medium term. Besides, it represented a huge financial commitment from the government and demonstrates President Buhari’s commitment to export diversification.

Our Reporter

 

THE JUA Kickstarter Fund, a fund to provide African entrepreneurs with capital to kickstart or expand their enterprises, has doubled to $2-million to become the biggest African capital venture fund launched by private individuals.

The fund launched by African industrialist Adam Molai in November last year with $1-million available for African entrepreneurs with a further $1-million been pledged by US-based angel investing and mentorship firm Simba Global Start-ups – bringing the total investment amount available to $2-million.

Announcing the additional funding, Molai says the added capital will allow the fund to make bigger investments in enterprises as well as fund more businesses.

“Simba Global Start-ups has pledged to match, like-for-like, our contributions which is absolutely incredible. This is an example of how Africans can work together to solve the challenges facing the continent. As an African entrepreneur who has experienced the grueling journey of establishing businesses, I firmly believe that Africa’s destiny lies in the hands of Africans.

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“It is not foreign investment that will provide us with a seat at the global table, but domestic investment. This is a view that is shared by Simba, which we will now use to benefit the African entrepreneurs and start-ups who are growing economies across Africa and creating jobs,” he says.

JUA [sunrise in KiSwahili] will provide successful applicants with funds – to launch or grow their businesses – as well as mentoring and guidance.

Entrepreneurs from across Africa or those who operate in Africa are eligible to apply.

The entire application process is electronic and funds are expected to be disbursed to successful applicants within 12 weeks of their shortlisting, in a first for Africa. Applications close on 31 January 2021.

Speaking on the ventures, Simba’s founder and CEO, Dr. Philippe Kisunzu said, Simba’s vision in investing in Africa’s future was not only to create jobs and strengthen African economies, but also to enable Africa to become the “financial benchmark for the world in the 21st century.”

“As a result of our JUA-SIMBA partnership, we hope to expand our vision exponentially on behalf of Sub Saharan African indigenous entrepreneurs who will not only create jobs for the citizens in the region, but also provide financial security for themselves and their families. With JUA-SIMBA partnership, we look to optimise our synergies to produce a combined societal impact greater than the sum of our individual societal impacts. Our deepest desire is that through our SIMBA Vision 2035, the most robust of the combined portfolio of startups/companies would have earned the rights to be publicly traded on platforms such as the NASDAQ or the NYSE by the year 2035, placing themselves in an enviable position to create wealth in Africa for Africans, by attracting angel investors and venture capitalists from all over the world, and thus making Africa a global economic powerhouse,” says Kisunzu.

In the two months since its launch, JUA has received over 500 applicants from across Africa.

Most of the applications have come from Nigeria, Kenya, South Africa and Zimbabwe. Entrepreneurs from Ghana, Tanzania, Benin, Namibia and eSwatini have also applied.

Entrepreneurs in need of capital for their ideas or those who are looking to expand their enterprises are encouraged to apply.

“We are looking to help African entrepreneurs grow or launch their businesses. Our priority is businesses with impact in terms of job creation and scalability across the continent. Obviously, entrepreneurs with proven businesses, solid business pedigree and who have clearly articulated their business propositions, target market, channels or those with innovative solutions to Africa’s many challenges stand a much better chance of being successful. I encourage all aspiring entrepreneurs in need of funding to ensure that they have interrogated, analysed and stress-tested their ideas to stand a better chance of success,” says Molai.